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Tuesday, December 06, 2016

FLASHBACK: Barack Obama may cancel new helicopter fleet over costs

U.S.
President Barack Obama takes a question during closing remarks of the Fiscal
Responsibility Summit Photo: BLOOMBERG NEWS

2:28AM
GMT 24 Feb 2009

Barack
Obama has vowed to crack down on costly military programs, citing a project to
build a new presidential helicopter fleet as an example of the procurement
process "gone amok."

At
the conclusion of a fiscal meeting at the White House, Mr. Obama faced questions
from Republican and Democratic lawmakers, including his former presidential
rival, Senator John McCain.

Mr.
McCain bemoaned cost overruns in military procurement. The new fleet of 28
Marine One helicopters being built by Lockheed Martin Corp., now over budget at
$11.2 billion, will cost more than Air Force One.

Mr.
McCain will introduce a bill this week to rein in military weapons programs
which now routinely run billions of dollars over budget.

Mr.
Obama said "the excesses of procurement" were on his list of highest
priorities.

With
the United States facing the worst economic crisis in decades, Mr Obama has
pledged to review major defence programs.

"I
have already talked to (Defence Secretary Robert) Gates about a thorough review
of the helicopter situation. The helicopter I have now seems perfectly adequate
to me," Mr Obama said. " Maybe I've been deprived and I didn't know
it."

"It
is an example of the procurement process gone amok and we are going to have to
fix it."

There was no media outcry when the above became public. Compare the below reaction to a similar announcement by President-elect Donald J. Trump.

________________

Trump
Threatens to Cancel Air Force One Order, Boeing Stock Slips

By
Liz Johnstone and Courtney Kube

President-elect
Donald Trump threatened to cancel Boeing's order for the new Air Force One in a
Tuesday morning tweet, citing high costs.

In
a surprise appearance in front of reporters at Trump Tower after sending the
social media message, Trump expanded on his latest target for negotiation.

"Well,
the plane is totally out of control. It's gonna be over 4 billion dollars ...
and, I think it's ridiculous. I think Boeing is doing a little bit of a
number," Trump said. "We want Boeing to make a lot of money but not
that much money."

In
response to Trump, Boeing issued a statement regarding the Air Force One
program, putting the amount of their current contract at just $170 million with
more phases to come.

"We
are currently under contract for $170 million to help determine the
capabilities of these complex military aircraft that serves the unique
requirements of the President of the United States. We look forward to working
with the US Air Force on subsequent phases of the program allowing us to
deliver the best planes for the President at the best value for the American
taxpayer," the statement read.

Trump
spokesman Jason Miller did not answer directly how Trump knew the price of the
new Air Force One, but according to the latest figures, Trump is likely correct
about the eventual $4 billion price tag, which would be paid out over the next
decade or more. Research and development is already at $2.7 billion for the
first two years, a number that is already budgeted and approved, and the
Government Accountability Office warned last year that the cost would be
approximately $3.2 billion. By the time the aircraft is delivered, the total
cost will likely be over $4 billion, because the government still has to buy
the two aircraft once they are built.

Air
Force One is so much more expensive than commercial planes because of the
communications package and air defense measures. Boeing was the only choice for
the build because it's an American company and they have the only four-engine
aircraft, a necessity due to the weight.

Keeping
the old Air Force One is an option, but not an ideal one. The plane has a
lifespan of about 30 years, and the current ones are in their late 20s. As the
planes age, safety becomes a concern while maintenance and other costs increase.

It's
not clear what prompted Trump to threaten the aircraft manufacturer with the
cancellation of its government contract. Following his tweet, Boeing stocks
slid by more than 1 percent in premarket trade, according to CNBC.

Before
the tweet, stocks were trading at $152.16. Shares fell to a low of $149.75
immediately after the tweet, approximately a $1.48 billion hit to Boeing's
market cap — not a large impact relative to Boeing's overall market cap, but a
dip nonetheless. Shares came back some since Trump tweeted, and opened at
$150.85. By midday trade, Boeing's stock was down 86 cents, according to
MarketWatch.

Trump
formerly owned stock in Boeing, Miller said on a transition call Tuesday, but
sold it in June 2016 along with all other stocks he held.

Exactly
how Trump will take on the price of the plane, Miller said, "We can get
into that more after the president-elect is sworn in on January 20."

In
2009, President Obama canceled Lockheed's order for a new Marine One, a
23-helicopter program with ballooning costs.

"The
helicopter I have now seems perfectly adequate to me," President Obama
said at the time.

Air Force One waits
on the tarmac at Andrews Air Force Base, Md., on Dec. 6, before President
Barack Obama boards en route to MacDill Air Force Base in Tampa, Fla.

About This Blog & the National Black Republican Association

Lieutenant Colonel Frances Rice, United States Army, Retired is a native of Atlanta, Georgia and retired from the Army in 1984 after 20 years of active service. She received a Bachelor of Science degree from Drury College in 1973, a Masters of Business Administration from Golden Gate University in 1976, and a Juris Doctorate degree from the University of California, Hastings College of Law in 1977.
In 2005, she became a co-founder and Chairman of the National Black Republican Association, an organization that is committed to returning African Americans to their Republican Party roots.
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Email contact: NationalBlackRepublican@Gmail.com